HR garbage in, HR garbage out

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As someone who regularly gets involved in HR data management I have inevitably come across the work of the two biggest players in the field of data production, SAP and Oracle.  SAP (see slide 5) even misinterpreted my own HR Maturity Scale to help sell their products (which they used without my permission or guidance, I hasten to add).

Yet all HRIS (HR Information Systems) providers fail to follow their own golden rule of IT – ‘garbage in, garbage out’ – which has always been a founding principle since the birth of the computer age.

The whole point of any management information system, HR or otherwise, is to add value in some way – management that does not add value is redundant.  So the data used has to provide information that reveals something about the output, cost, revenue or quality of the organisation. If it does not serve this purpose it is only fit for the garbage bin. So what information comes out of a typical HRIS? Basic record keeping including -

  • How many people are employed (although even this is amazingly difficult to pin down in a dynamic environment)
  • Whether they are absent or not (assuming they are accurately and honestly registered as such)
  • How much they cost in salary and benefits (but nothing about what value they add) and
  • Whether they completed their last appraisal (which may or may not have been a pointless exercise).

This type of data has to be regarded as garbage though until some sense can be made of it in value terms.  Interestingly, Oracle’s own VP of HR, Vance Kearney, once happily declared (at a conference on HR Strategy) that he had nothing to do with strategy and so his own department was merely an ‘admin’ function (as was Neil Roden’s HR function at RBS apparently).  This admission places Oracle itself at Stage 1, the lowest value Stage for HR on the Maturity Scale, so don’t raise your expectations too high of Oracle ever teaching you how HR can add value.

Of course to turn HR data into useful, evidence-based, management information requires –

  • A systematic way of deciding how many people you should be employing at any particular point in time
  • An effective performance management system that tells you whether those at work are performing well (and whether you can afford to do without the ones that are absent)
  • A meaningful review process, rather than the sort of anodyne performance reviews and personal development planning processes often used as a substitute, that will provide a clear view of what value is achieved by each employee – and this could be a negative value (it’s a pity none of the banks had such a system in place)

All of these, by their very nature, are difficult to design and implement effectively; but then that is precisely why they offer such a huge, competitive advantage.  It is the ability to rise to this challenge,  using garbage-free, evidence-based, value-driven information systems that will mark out the best organisations from those who employ expensive HR bureaucrats.

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Up a creek without a paddle? HR Directors who never trained as business partners.

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A new phenomenon has appeared, quite unexpectedly, on the HR horizon. These are the HR Directors who jumped on the bandwagon of appointing ‘HR business partners’ (BP’s) without ever actually having held down that role themselves.  I know this for a fact because some of them have employed me to teach their HR managers, advisers and analysts to become ‘HR BP’s’, having never been trained themselves and therefore not realising that this should signify a conscious and deliberate break from their own, conventional, HR thinking.  If we are looking for analogous situations to express how serious this is then the equivalent in the medical profession would be someone trying to become a consultant having missed out the step of registrar or, in the army, a general being appointed who had never been into battle (certainly true for many HR Directors who never had industrial relations problems before).

In practice it produces a serious disconnect between bright HR professionals, who can see that the whole rationale behind HR business partnering is to produce business evidence that their people management practices add value, and their bosses, who are perpetuating non-evidence based policies (e.g. diversity).  The BP’s also start to regard traditional HR, quite rightly, as a diluted and much lower form of ‘management’ and suddenly realise why its very existence has always been so precarious (particularly in the present climate).  Worse still, once they have earned their spurs as a true BP they are bound to challenge everything they have been taught before.  They have little time for their previous day job because in their eyes they now have much bigger priorities and opportunities to address than giving, say, legal advice for a situation that should never have arisen in the first place (e.g. bullying or sexual harassment?).

They then inevitably want to question, and eventually dismantle, the crumbling edifice that is the typical HR framework of (see EBM has to be a new paradigm): -

Job evaluation and grading – plenty of evidence to show it is often a rigid and expensive way of managing rewards that does not produce the highest performance levels possible

Engagement surveys – they realise the theory behind the employee-customer profit chain is suspect and the links between engagement and performance are never as simple as it suggests

Competence frameworks – because, apart from the specious theory that produced this industry – in practice, quite frankly, anyone with any common sense always knew they were going to become a bureaucratic nightmare without any evidence of added value

Performance management – until they are confident that the measures being used actually measure value

Leadership development –  however attractive it might sound there is no common definition of what effective leadership means and therefore no evidence can be produced to say that effective ‘leadership’ has ever been achieved

Of course, none of this accords with their non-business-partner, HR Directors’ expectations who, over recent years, blithely followed Ulrich’s lead (correlative, as opposed to evidence-based), which spawned a commonly-held view that there had to be a shift in focus from HR transactions to strategy and that this required steady-state, continuous developments in HR’s role.  What they failed to realise was that properly trained, evidence-based, HR BP’s are taught that this shift actually represents a discontinuous, seismic shift in the paradigm on which strategic HR is predicated.  Consequently such HR Directors, who have recently been experiencing the decidedly uncomfortable feeling of the ground moving under their feet (especially those in the public sector being asked to make 25% cuts), are having to make a conscious decision as to which side of this widening chasm they will jump to for survival?

For personal development linked to this topic visit the Consummate Professional Series


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